- Brokers say institutional investors, high net worth individuals return with buy orders of blue chips
- Capital market promoters relieved with rebound after negative performance in aftermath of landslide SLPP victory
- Foreigners remain bearish; net selling of Rs. 1.2 b brings YTD net outflow to over Rs. 26 b
Investor sentiments appear to have improved as the Colombo stock market yesterday bounced back to post a near 1% gain with turnover touching a new recent high.
The ASPI increased by 0.89% or 45.65 points to close at 5,196.40 points, while the S&P SL20 Index also increased by 0.96% or 21.30 points to close at 2,231.78.
Turnover increased by 301.2% relative to Monday to Rs. 2.7 billion.
Yesterday’s gain brought relief, especially for capital market promoters and brokers since post the landslide victory of Sri Lanka Podujana Peramuna (SLPP) at 5 August’s General Election, the market remained lacklustre, with indices dipping amidst low turnover.
Year to date, the ASPI is down 15% and S&PSL20 Index is lower 24%, but have gained since the country re-opened for the post-COVID-19 recovery period in mid-May.
First Capital said the return of the institutional investors reverted the bourse back to the positive sentiment, after being held back in the red zone for the past two sessions.
It said COMB led the turnover, contributing to 37% of the total, with the reactivated investor sentiment from expectancy of the favourable impact from the IFC equity investment. Moreover, the parcel trades in COMB, JKH and HNB boosted the turnover amounting to 40%.
“Index experienced a gradual uptrend till the final hour of trading, thereafter recorded a stagnant movement and closed at 5,196 gaining 46 points,” First Capital said.
Foreign investors however remained negative extending net outflow. Yesterday the market saw net outflow of Rs. 1.2 billion as against Rs. 164 million on Monday. Foreign selling dominated in Commercial
Bank and John Keells Holdings, and total foreign sales accounted for 45.8% of the turnover.
According to CT CLSA Securities year to date, net foreign outflow surpassed Rs. 26 billion mark.
NDB Securities said indices closed in green as a result of price gains in counters such as LOLC Holdings, Ceylon Tobacco Company, and Dialog Axiata.
It said high net worth and institutional investor participation was noted in Commercial Bank, John Keells Holdings, and Hatton National Bank.
Mixed interest was observed in Sampath Bank and People's Insurance, whilst retail interest was noted in Access Engineering and Tokyo Cement Company.
The banking sector was the top contributor to the market turnover (due to Commercial Bank, Sampath Bank and Hatton National Bank) whilst the sector index gained 0.71%. The share price of Commercial Bank increased by Rs. 0.40 (0.52%) closing at Rs. 76.60 whilst foreign holdings decreased by 10,684,471 shares. The share price of Sampath Bank moved up by Rs. 1.40 (1.13%) to close at Rs. 124.90. The share price of Hatton National Bank appreciated by Rs. 1.00 (0.88%) to close at Rs. 115.10.
Capital Goods sector was the second highest contributor to the market turnover (due to John Keells Holdings) whilst the sector index increased by 1.28%. The share price of John Keells Holdings gained Rs. 1.10 (0.96%), closing at Rs. 116.00, whilst foreign holdings decreased by 2,502,826 shares.
LOLC Holdings was also included amongst the top turnover contributors. The share price of LOLC Holdings recorded a gain of Rs. 5.60 (4.07%) to close at Rs. 143.20.
Furthermore, Ceylon Guardian Investment Trust announced their first and final dividend of Rs. 1.15 per share whilst Ceylon Investment announced their final dividend of Rs. 0.25 per share.